PRC Rural Land Contracting Law (After Draft Revisions)

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Chapter I: General Provisions

Article 1: In accordance with the Constitution, this law is set forth to stabilize and perfect the unified system of dual-level operation with household contracting as its foundation, to give farmers long-term and secured land use rights, to protect the legal rights and interests of the parties to rural land contracting and operation, promote agriculture, the development of the rural economy, and social stability in rural areas.

Article 2: The term "rural land" used herein refers to arable land, forest land, grassland, and other types of land used for agriculture which are owned by farmer collectives or owned by the State and used by farmer collectives in accordance with law.

Article 3: The State is to establish and operate a system for the contractual operation of rural land.

Rural land contracting is to adopt the method of contracting to households within the rural collective economic entity, but for wasteland and other types of rural land that are unsuitable for household contracting, competitive bidding, auction, public negotiation, and other methods of contracting may be employed.

Article 4: Article 4 The nature of ownership of rural land is to not be changed as a result of contracting.Contracted land cannot be bought and sold.

The State is to provide legal protection for the long term stability of rural land contracting relationship.

Article 5: Article 5 Members of rural collective economic entity have the right to contract and operate land that is contracted out by their own rural collective economic entity, and to enjoy land contracting and operation rights.

The land contracting and operation rights of members of the rural collective economic entities is to not be deprived or illegally restricted by any unit or individual.

Non-members of the collective economic entity, except in the circumstances provided in Section III of this law, must not contract land that is contracted out by the rural collective economic entity and do not enjoy land contracting and operation rights, but may legally acquire land operation right through land transaction.

Article 6: Land contracting and operation rights obtained through household contracting is to be bifurcated into land contracting right and land operation right in transaction.

Land contracting right refers to the right to contract land in accordance with law that is enjoyed by members of the rural collective economic entity.

Land operation right refers to the right to, within a certain time limit, occupy contracted land for autonomously organizing production, cultivation and disposing of products and for earning corresponding incomes from the land.

Article 7: Men and women is to enjoy equal rights with respect to the contracting of rural land. The legal rights of women is to be protected in the contracting process, and women’s rights to contracting land is to not be deprived or illegally restricted by any unit or individual.

Article 8: Contracting and operating of rural land is to uphold the principles of openness, equality, and fairness, and is to properly balance the interests of the State, the collectives, and individuals.

Article 9: Contracting of rural land is to respect national laws and regulations and ensure the reasonable development and sustainable use of land resources.During the contracting period, contracted land must not be used for non-agricultural construction without approval.

Article 10: The State is to protect the ownership of collective land and the land contracting rights and land operation rights from being violated by any unit or individual.

Article 11: The administrative agencies responsible for agriculture and forestry within the State Council is to be separately responsible for national leadership and management of rural land contracting and contract management in accordance with the responsibilities assigned by the State Council. The administrative agencies for agriculture and forestry at the county level or higher is to be separately responsible for rural land contracting and contract management within their particular administrative jurisdiction in accordance with their respective responsibilities. The township government is to be responsible for rural land contracting and contract management within its administrative jurisdiction.

Section II Household Contracting

Sub-Section I: The Rights and Obligations of the Contract Issuers and Contracting Parties

Article 12: For collectively owned land that is owned by village farmer collective in accordance with law, land contract is to be issued by the village collective economic entity or the village committee; for land collectively owned by two or more collective entities within the village, land contract is to be issued by such collective entities or villager groups. Where land contract is issued by the village collective economic entity or village committee, land ownership by various collective economic entities within the village is to not be changed.

For the land owned by the State and used by farmer collective in accordance with law, land contracts is to be issued by collective economic entity, village committee or villager group that uses such land.

Article 13: The contract issuing party is to enjoy the following rights:

(1) to issue contracts for land that is owned by the farmer collective or owned by the State and used by the collective in accordance with law;

(2) to supervise the contracting household's reasonable use and protection of the land in accordance with the land contract;

(3) to prevent any action by the contracting household that damages the contracted land or agricultural resources;

(4) other rights that are set forth in laws and administrative regulations

Article 14: The contract issuing party is to have the following obligations:

(1) To protect the land contracting and operation rights of contracting
households, and not illegally alter or terminate the land contract;

(2) respect the sovereignty of contracting households with respect to productive operation, and not interfere with the normal production management operations undertaken by contracting households in accordance with law;

(3) provide production, extension, and information services to contracting households as set forth in the land contract;

(4) execute comprehensive land use planning at the county and township levels, and organize the construction of basic agricultural infrastructure within the collective economic entity;

(5) Other obligations provided for in laws or administrative regulations

Article 15: The contracting party for household contracts is to be farm households within the collective economic entity.

Article 16: The contracting party is to enjoy the following rights in accordance with law:

(1) the rights to use, profit from, and transact contracted land, and the right of autonomy over production operations and disposition of products;

(2) when contracted land is expropriated, requisitioned, or occupied in accordance with law, the right to receive the corresponding compensation as provided by law; when operation right to contracted land is transferred; the right to receive corresponding compensation in accordance with law for any investments that have increased the productivity of the land at the time of transacting land operation right;

(3) other rights that are set forth in laws and administrative regulations.

Article 17: The contracting party bears the following obligations:

(1) persist in the agricultural use of the land, and must not use it for non-agricultural purposes;

(2) protect and reasonably use the land in accordance with law, and not cause permanent damage to the land;

(3) other obligations as set forth in laws and administrative regulations.

Section II Principles and Procedures for Contracting

Article 18: Land contracting shall respect the following principles:

(1) at the time of organizing land contracting according to uniform rules, members of the collective economic entity should be granted equal rights to contracted land in accordance with law; members may also voluntarily forfeit their right to contracted land;

(2) democratic consultation, fairness and reasonableness;

(3) in accordance with the rules of Article 12 of this law, the land contracting plan must be approved by 2/3 of the Villager Assembly or 2/3 of Villager Representatives;

(4) the contracting process should be in accordance with law.

Article 19: Article 19 Contracting of land shal be completed in accordance with the following procedures:

(1) members of the collective economic entity should elect a contracting work group at a Villager Assembly Meeting;

(2) the contracting work group is to set and announce the land contracting plan in accordance with relevant laws and regulations;

(3) a meeting of the Villager Assembly or Villager representatives is to be convened to discuss and adopt the contracting plan;

(4) the contracting plan is to be implemented through openly and publicly organized activities;

(5) signing of contracts.

Section III The Length of the Contracting Term and Land Contracts

Article 20: The contract term for arable land is to be 30 years. The contracting term for grassland is to be 30 to 50 years. The contracting term for forestland is to be 30 to 70 years.

The contract term for arable land provided by the preceding clause is to be extended by 30 years after expiration.

Article 21: The contract issuing party is to sign a written contract with the contracting household.

Contracts generally contain the following provisions:

(1) The names of contract issuing party and the contracting household, and the names and addresses of the person responsible for contract issuance and the representative of the contracting household;

(2) The name, location, area, and quality of the contracted land;

(3) The contract term, including starting and ending dates;

(4) The use of the contracted land;

(5) The rights and obligations of the parties to the contract;

(6) Liabilities for breach of contract.

Article 22: The contract is to be valid from the date of its formation. The contracting party is to receive land contracting and operation rights from the time that the contract becomes valid.

Article 23: The State is to apply uniform registration for arable land, forestland, and grassland, which is to be specifically prescribed by administrative laws and regulations.

Land contracting and operation right certificates, forest right certificates, and other certificates, is to include all family members who have land contracting right.

Article 24: After the contracts have become valid, the contract issuing party may not, due to changes to the identity of the person responsible for contract issuance, alter or terminate the contract, or change or alter the contract due to the division or merger of collective economic entities.

Article 25: State organs or their employees may not use their authority to illegally
interfere with the contracting of rural land, or to alter or terminate land contracts.

Section 4 Protection and Assignment of Land Contracting Right

Article 26: During the contract term, the contract issuing party may not take back the contracted land.

The land contracting and operation rights of farmers who migrate to cities for work is to be maintained, and giving up land contracting right is to not be used as the condition for farmers to move to and settle in cities. Whether to retain land contracting and operation rights or not is to be decided by the farmers instead of anyone else.

Where the entire household of the contracting party moves to and settles in a city or township, being included in the affordable-housing system and the social security network, and losing the membership of rural collective economic entity, assignment of land contracting right and interests is to be supported and guided.

During the contract term, when the contracting party surrenders his land, the contract issuing party is to make appropriate compensation to the contracting party for the investment he has made on his contracted land to increase its land productivity.

Article 27: During the contract term, the contract issuing party is to not readjust contracted land.

During the contract term, in cases of special circumstances and serious conflicts, and an appropriate readjustment of arable land or grassland between isolated households is necessary, the principle of maintaining the stability of land contracting and prohibiting massive reallocation is to be followed, and the approval of 2/3 of the members of the Village Assembly or 2/3 of the Villager Representatives must be obtained, as well as approval by the township government and the county government administrative unit responsible for agriculture. The terms of any land use right contracts stipulating that readjustments is to not be conducted must be honored.

Provinces, autonomous regions, and province-level municipalities may promulgate regulations on specific measures related to such matters.

Article 28: The following types of land is to be used in readjustments of contracted land or contracted to newly added population within the village:
(1) Flexible land that has been reserved by the village collective in accordance with law;

(2) Land that has been added through reclamation and other methods in accordance with legal methods;

(3) Land that has been retrieved by contract issuing parties in accordance with law and land that has been returned by contracting parties voluntarily in accordance with law.

Article 29: During the contract term, the contracting household may voluntarily return the land to the contract issuing party. The contracting household is to notify the contract issuing party in writing six months in advance of returning the land to the contract issuing party.Contracting parties who return their land during the contract term is to not have the right to demand additional contract land during the contract term.

Article 30: During the contract term, when a married woman has not received contracted land in her new village of residence, the contracting issuing party may not take back her originally contracted land; when a woman is divorced or widowed, the contract issuing party may not take back her contracted land if she resides in her original village of residence, or resides in her new village of residence but has not received contracted land in that village.

Article 31: The interests deserved by the contracting party may be inherited in accordance with the Inheritance Law.

Upon the death of a contracting party to forest land, the heirs may continue to contract the land for the remainder of the contracting term.

Article 32: For the convenience of farming or other reasons, contracted land of the same collective economic entity may be exchanged between contracting parties.

Article 33: Upon approval by the contract issuing party, contracting parties may assign part or all of their contracted land to another farm household of the collective economic entity, and thereby establishing a new contracting relationship formed between that household and the contract issuing party and terminating the contracting relationship between the contract issuing party and the original contracting party.

Article 34: After exchange or assignment of contracted land within the collective economic entity, and the parties request registration of the transaction, an application should be submitted to the People’s Government at the County Level or higher. Those not registered must not oppose the rights of a good faith third-party.

Section V: Protection of Rural Land Operation Right and Transactions of Such Rights

Article 35: Land operation right may be leased (transferred), contributed in exchange for shares of equity, or transacted by other means in accordance with law.

Article 36: Transactions involving land operation right must follow the following principles:

(1) in accordance with law, voluntariness and with compensation. No units or individual may compel or obstruct the transaction of land operation right;

(2) land ownership and agricultural land use is to not be changed; the overall agricultural production capacity and the agricultural ecological environment is to not be damaged;

(3) the term of transfer is to not exceed the remaining term of the contract period;

(4) the transferee is to have ability to engage in agricultural operation;

(5) Under equal conditions, members of the collective economic entity is to possess priority rights.

The contract issuing party and the contracting party are to perform the transaction contract in accordance with law, and is to respect the rights acquired by a third party in accordance with law and the transaction contract. 第三方依法依合同取得的权利.

Article 37: The contracting party possesses the legal right to decide for one’s own as to whether or not to transact land operation rights, and as to the form of the transaction.

Upon agreement in writing by the contracting party or its authorized agent and notification of the collective economic entity, the holder of operation right to the contracted land may be re-transacted to improve agricultural efficiency.

Upon agreement of the contracting party, the holder of operation rights may, in accordance with law, invest in improving soil, construct necessary ancillary facilities for agricultural production, and receive proper compensation for the investment according to the contract.

People’s governments at the county level or higher are to establish the system of eligibility review, project review, and risk prevention for transactions of land operation right involving social capital such as industrial and commercial enterprises. The collective economic entity may charge proper administration fees in case that social capital such as industrial and commercial enterprises obtains land operation right by transaction. Specific regulations are to be formulated by the administrative departments of agriculture and forestry of the State Council.

Article 38: Article 38 Any transfer fees, rents, equity value of shares, etc. from transactions involving land operation right is to be set through negotiations between the parties. The interest from any transaction, except in the circumstance provided in Article 37 of this law, is to be retained by the contracting party, and any unit or individual is to not unilaterally intercept or reduce such interests.

Article 39:Upon lease (transfer), contribution in exchange of equity shares, or other form of transaction involving land operation right, the parties is to execute a written contract, and the contract issuing party is to be notified.

The contract for transfer of land operation rights is to generally include the following elements:

(1) The name and address of both parties;

(2) The name, location, area and land quality class of the land for transfer;

(3) The period of the transfer and the starting and ending dates of the transfer contract;

(4) Use of the land to be transferred;

(5) Rights and obligations of both parties;

(6) Price of the transfer and the payment method;

(7) Ownership of compensation for attachments to and standing crops on the land when the land is expropriated or requisitioned in accordance with law;

(8) Liability of breach of the contract.

Article 40:After the contracting party transacts its operation right to all or part of his contracted land to a third party for a specified period of time, the contracting relationship between the contracting party and the contract issuing party is not to be changed, and the land contracting right of the contracting party is not to be changed.

Where a third party changes the agricultural use of contracted land without authorization, abandons farmland for more than two consecutive years, or seriously damages the contracted land or the ecological environment of contracted land, the contract issuing party or the contracting party has the right to terminate the land operation right transaction contract and retrieve the land operation right. The third party shall pay for damages to the contracted land and ecological environment.

Where the contracting party engages in a transaction with a term of less than one year, a written transfer contract is not required.

Article 41: In order to develop the agricultural economy, contracting parties may voluntarily join their land operation right as stock shares for the purpose of engaging in cooperative agricultural production and agricultural industrialization.

Article 42: The contracting party may use land operation right as collateral for financing through financial institutions. The third party who has acquired land operation right through transaction may use land operation right as collateral for financing through financial institutions upon written agreement from the contracting party or its authorized agent.Specific regulations are to be formulated by relevant departments of the State Council.

Chapter III Other Forms of Contracting

Article 43:The rules of this chapter apply to competitive bidding, auction, public negotiation, and other forms of contracting with respect to rural land, such as waste mountains, waste gullies, waste hills and waste riverbeds, that are unsuitable for household contracting.

Article 44:Where other forms of rural land contracting are employed, a written contract shall be signed. The rights and obligations of both parties, contract period and other matters may be decided through consultation between two parties. Where the land is contracted through competitive bidding and auctions, contract fees are to be determined through a public bidding process; and where the land is contracted through public negotiation or other channels, the contract fee is to be determined through negotiation.

Article 45:Waste mountains, waste gullies, waste hills and waste riverbeds may be contracted through competitive bidding, auction, negotiation or other channels, and may also be contracted for operation or for joint stock cooperation after the contracting rights to such land are distributed to the members of the collective economic entity.

Article 46:Under equal conditions, members of the collective entity shall have priority rights to rural land contracted through other forms of contracting.

Article 47:Where the contract issuing party contracts rural land to a unit or individual outside of the collective economic entity, the approval of 2/3 of the Villager Assembly or 2/3 of the Village Representatives, as well as the approval of the township government, must be obtained prior to such contracting.

Where the land is contracted to a unit or an individual outside of the collective economic entity, the contract shall be entered into upon verification of the contracting party’s credit standing and operation ability.

Article 48:Upon registration in accordance with law and issuance of written Land Contracting and Operation Certificate, or Forest Right Certificate for rural land that has been contracted through competitive bidding, auction, or public negotiation or other forms of contracting, the contracting and operation rights to such land may be assigned, leased, contributed as stock, mortgaged, or transacted by other means.

Article 49: Upon the death of a contractor of rural land that has been contracted through competitive bidding, auction, or public negotiation or other forms of contracting, the interests to which he is entitled may be inherited in accordance with the Inheritance Law; during the contract term, the heirs may continue to contract the land.

Chapter 4 Dispute Resolution and Legal Liabilities

Article 50:Where disputes arise concerning contracting and operation rights, the two parties may resolve the dispute through consultation and may also request mediation by the Village Committee or the township government.

Where the parties are unwilling to engage in consultation or mediation, or consultation or mediation have been unsuccessful, they may apply for arbitration by the land contracting arbitration body, or may directly file suit with the People’s Court.

Article 51:Where the parties are unsatisfied with the ruling of the land contracting arbitration body, they may file suit in the People’s Court within 30 days of receipt of the arbitration ruling. Where a suit is not filed during this period, the arbitration ruling is legally binding on the parties.

Article 52:Any unit or individual who violates the contracting and operation rights of the contracting party or the operation right of a third party shall be subject to civil liabilities.

Article 53:Where the contract issuing party exhibits any of the following behavior, it shall bear responsibility for ceasing the violation, returning the original thing, restoring the original situation, eliminating the harm, removing the danger, compensating for damages, and other civil liabilities:

(1) interfering with the legally protected production autonomy of contracting parties;

(2) violating the rules concerning the taking back or readjustment of land as provided for by this law;

(3) compelling or impeding transactions of contracted land;

(4) compelling contracting parties to surrender or alter their contracting and operation rights for transactions of contracted land under the guise of minority obeying majority;

(5) conducting contracting through competitive bidding under the guise of designating land as “consumption land” and “responsibility land”;

(6) taking contracted land back to offset the money that contracting parties owe;

(7) depriving women of, or violating, the land contracting and operation rights legally enjoyed by women;

(8) other behavior that violates the contracting and operation rights of contracting parties.

Article 54:Any provisions of land contracts that are against the wishes of the contracting party or violate the mandatory rules in law or administrative regulations with respect to taking-back or readjustment of land, is to be deemed invalid.

Article 55:Where one of the parties fails to meet the obligations specified in the contract or meets the obligations in a manner inconsistent with the agreement, he is to bear civil liabilities in accordance with the PRC Contract Law.

Article 56:Where any unit or individual compels transaction of contracted land, that transaction is to be deemed invalid.

Article 57:Any unit or individual who illegally intercepts or reduces the profits of the contracting party in a transaction of contracted land, must return them to the contracting party.

Article 58:The violation of land management laws, illegal takings of land or embezzlement or improper use of compensation for land taking is to constitute a crime and is to be subject to criminal penalties; if the crime results in damages to any other party, payment of damages and other compensation is to apply.

Article 59:Where the contracting party or a third party illegally uses the land for non-agricultural construction, fines is to be imposed in by the local People’s Government at the county level or higher in accordance with relevant laws.

Where the contracting party or a third party permanently damages the contracted land, the contract issuing party is to have the right to terminate the contracting party’s rights, and is to have the right to require compensation for the resulting damages.

Where the contracting party abandons its contracted land for more than two consecutive years, the contract issuing party may collect fees and use the fees for cultivation on the land; where the contracting party abandons its contracted land for more than three consecutive years, the contract issuing party may tack bak the contracted land for recontracting in accordance with legal procedures.

Article 60:Article 60 Where State units or personnel use their official capacity to interfere with rural land contracting, to change or alter land contracts, interfere with the legally protected production autonomy rights of the contracting party or a third party, or compel or impede the contracting party or a third party from engaging in transactions of contracted land, and it results in damages, they should bear the responsibility for compensation; in cases of serious violations, they should be subject to administrative penalties from upper level organs or their own work unit; in case where the behavior constitutes a crime, they is to be subject to criminal penalties.

Chapter V: Supplementary Provisions

Article 61:Article 61 The contracting of land that has already been contracted in accordance with national rules governing rural land contracting prior to the implementation of this law, including land which has been contracted for periods longer than those specified by this law, is to continue to be in effect following the implementation of this law, and does not need to be recontracted. Where land contracting right certificates or forest right certificates have not been issued they should be issued.

Article 62:Flexible land that has been reserved prior to the implementation of this law should not exceed five percent of the collective economy entity’s total land area. Where the amount of flexible land reserved is less than five percent, no additional reserving of flexible land is to be permitted.

Where there was no flexible land left before this law took effect, there must be no flexible land left after this law takes effect.

Article 63:The Standing Committee of the People’s Congress of each province, autonomous region and provincial-level municipality may promulgate implementing regulations in accordance with this law and the practical situation in its administrative jurisdiction.

Article 64:Principles and procedures for determining the membership of a rural collective economic entity and other matters related to such determination is to be prescribed by laws and regulations.